AUSTIN Japan is clearly our main investor market and the number of these buyers is rapidly increasing. I think most of our senior demand will continue to come out of Japan – I believe there is still so much potential. I would always focus far more on Japan than Europe.

GUESDE There is clearly appetite in Japan, but the clear signs and feedback we are getting from Japanese investors is that they have a preference for yen. They have pockets of Australian dollars, but they will be shrinking and they are under pressure to invest in local currency. In the long run, if supply volume picks up again over the next three years, there will have to be yen tranches.

CHEN We have always been currency agnostic. The thinking is exactly the same with our US dollar programme in the sense of the value of diversification of jurisdictions and investors. Japan is increasingly important and there is a lot of engagement from the region. Being a regular issuer of yen bonds is a long-term strategy for us.

AUSTIN I suspect the larger Japanese banks will prefer Australian dollars – because they raise Australian dollar deposits from ‘Mrs Watanabe’ – but the regionals will want yen.

ZILELI Japanese investors have been massive supporters of our credit cards programme. When we issued our last cards trade, in February, there was no discussion about a yen tranche. But as significant supporters of the programme, if they cease to invest in Australian dollars we would have to consider yen. However, we will always issue in Australian dollars if we can find enough demand – we would only consider other currencies if we cannot.

RIEDEL We are always happy to listen to investors’ currency preferences and seek to meet their needs, so long as there is a match economically. We are very engaged and invested in the Japanese market and have issued in yen. We have to design our funding strategies to suit investor requirements, and some Japanese investors want to see yen tranches. This will continue to be our approach.

Euros is less certain. We have done euro transactions in the past, although not for a while, and we will always have the interest to do so. When we talk about foreign currency issuance it is like the CLO [collateralised loan obligation] versus RMBS [residential mortgage-backed securities] discussion – it is a relative value conversation with investors.

If it makes sense to issue in euros, of course we would do so – and we look to our partners offshore to give us advice about this. However, many European investors are very comfortable in Australian dollars.

FISCHER In 2022, we intended to issue in the US dollar market but unfortunately the basis between the Australian and US dollars widened substantially at the time and we would have had to get the deal re-rated, so we opted to drop the US dollar tranche and completed the deal in Australian dollars only.

We will issue again in US dollars – it is part of our programme, whether it is a scheduled amortisation or a bullet structure. The response last year was very positive. Having said this, there has been plenty of demand for our Australian dollar issuance for the past few years.

GUESDE The real issue is the basis – it is super volatile. There is probably always a risk of disconnection between launching a public deal and pricing. Until volatility settles, issuers will likely take a private placement type of approach with a handful of investors, building appetite and locking it in when the basis is there. It is very challenging for public deals with foreign currency tranches for the time being.

FISCHER A lot of Pepper Money paper was sold in that period last year, and from the feedback we received everyone was quite happy. The only thing that has been mentioned is that the BWIC [bids wanted in competition] process was not very transparent.

GUESDE Australian paper wasn’t sold at a discount. It was also a good test of relative value. Investors sold Australian paper because it offered the best value – and they came back as soon as they could. It was good test, and Australian issuance passed it.

BARRY It was about A$2 billion (US$1.3 billion) of paper absorbed in the secondary market within a couple of weeks. It was a massive endorsement of a secondary market that market users have been questioning for years. It was a great case study for the industry.

BARRY Around the Global ABS conference in June we certainly had conversations with new investors that had made that observation, for sure.